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What Recent Executive Orders and the Review of Federal Financial Assistance Means for You

**This is a comprehensive blog that covers the key developments, implications, and strategies for grant seekers navigating the landscape of federal financial assistance under the new Administration. Updates to this blog will continue to be made as the situation develops. Blog last updated 3/19/25 at 2:58 pm ET**

 

The federal grant landscape was upended early this year by the release of several Executive Orders and Memorandum M-25-13, a sweeping directive that temporarily halted financial assistance programs for a review process aligned with the new Presidential Administration’s policy priorities. While the Administration later rescinded with memorandum M-25-14, grant seekers across all sectors - including public agencies and nonprofits – still face a multitude of questions and uncertainty around the effect of recent Executive Orders on federal funding opportunities.

 

A Timeline of Key Events

• Week of January 20, 2025 – President Trump issued several Executive Orders targeting federal funding that would support “DEI” (Diversity, Equity, and Inclusion), “Clean Energy” (“Green New Deal”), “Woke Ideology,” and more.
• January 27, 2025 – In response to the Executive Orders, the Office of Management and Budget (OMB) released Memorandum M-25-13, requiring federal agencies to halt the obligation, disbursement, and administration of financial assistance programs after 5:00PM on January 28, 2025. On January 28, 2025 – A federal judge temporarily blocked the portion of the memorandum affecting "open grants," allowing already awarded funds to continue flowing until the court hearing on February 3, 2025.
• January 29, 2025 – The federal Office of Management and Budget (OMB) released Memorandum M-25-14, formally rescinding its previous memo and allowing federal financial assistance to flow to recipients. The Administration reaffirmed its intentions to complete full funding reviews of all agencies and departments. Funding pauses put into effect by other Executive Orders remained in effect.
• February 3. 2025 – U.S. District Court keeps temporary block on federal funding freeze in place, indicating recission of M-25-13 did not resolve the matters before the Court. On February 25, 2025 - U.S. District Judge Loren L. AliKhan expanded the preliminary injunction against the Office of Management and Budget (OMB) and related agencies, blocking the enforcement of OMB Memorandum M-25-13. The court's order mandates that all federal agencies cease implementing the directives of the memorandum and resume the release of any funds that were halted due to its provisions. The order specifies that it applies to all related actions and executive orders and is not satisfied by recission of the original Memorandum. Additionally, the administration is required to inform all relevant agencies of this injunction and provide a compliance status report by February 28, 2025.
• February 5, 2025 – The newly appointed Attorney General ordered a temporary pause in federal funding flowing from the Department of Justice to sanctuary cities. The stated purpose of the pause is to review current agreements and ensure they do not violate the law. A similar move during the previous Trump Presidential Administration was largely unsuccessful when reviewed by the courts. On February 7, 2025 - Several local jurisdictions, led by San Francisco and Santa Clara County, sued the Federal Government in response to the Attorney General's order to pause the flow of DOJ funding to "sanctuary cities".
• February 6, 2025 as of 12am ET – Grants.gov servers were taken down. The agency claims that improvements are being made to boost the system. According to the NIH, Grants.gov will be back online and operational on February 10th at 12:01AM EST. As of February 6, 2025 at 11am ET – Notwithstanding the previous note, Grants.gov appears to be operational. 
• February 7, 2025 – Through Notice Number NOT-OD-25-068, the NIH has updated its policy to cap indirect costs at 15 percent, which overrides existing negotiated indirect cost rate agreements (NICRAs). The cap applies to all future grants and existing awards to institutions of higher education (IHEs) on payments made after February 9, 2025. On February 10, 2025 - A federal court issued a nationwide injunction blocking the implementation of NOT-OD-25-068. The NIH cannot cap indirect costs at 15 percent while the court order remains in place.
• February 10, 2025 – According to Memorandum M-25-13, Federal agencies had to submit reports to the Office of Management and Budget (OMB) detailing funding programs that may conflict with executive orders or Administration policies. The Administration is expected to release further details on targeted program cuts or modifications in the coming weeks, based on those agency reports.
• February 21, 2025 - In response to President Trump's executive order requiring agencies terminate "equity-related" grants or contracts, a federal judge granted a preliminary injunction ruling the government could not freeze or cancel "equity-related" contracts or require recipients of grants to certify their programs do not promote diversity, equity, or inclusion (DEI). On March 17, 2025, in a lawsuit brought on by the American Association of Colleges for Teacher Education, the National Center for Teacher Residencies, and the Maryland Association of Colleges for Teacher Education, a federal judge ordered the Department of Education had to reinstate the TQP, SEED, and TSL grant awards for educator preparation.
• February 26, 2025 - The administration issued an Executive Order titled Implementing the President's DOGE Cost Efficiency Initiative. The order directs federal agencies to collaborate with the Department of Government Efficiency team over the next 30 days to review government contracts and grants. Where legally permissible, agencies are instructed to terminate or renegotiate these agreements to reduce overall spending and reallocate funds for greater efficiency. Additionally, the order mandates that every government payment includes a brief statement explaining its purpose. It also imposes a 30-day freeze on federal employee credit card usage, with certain exceptions.
• March 5, 2025 – The Supreme Court rejected an appeal by the executive branch of a lower court decision, which issued a temporary restraining order (TRO) that would force the administration to unfreeze more than $2 billion in foreign aid that was previously appropriated by Congress. The Supreme Court noted the District Court can move forward with clarifying the TRO and compelling the administration to distribute the funding.
• March 14, 2025 - President Trump signed Executive Order "Continuing the Reduction of the Federal Bureaucracy," to continue "the reduction in the elements of the Federal bureaucracy that the President has determined are unnecessary." Several agencies are required to submit a report confirming compliance with the EO within 7 days explaining what components or functions need to continue because they are "statutorily required" and to what extent. The EO also states the OMB should "reject funding requests for such governmental entities (identified in the EO) to the extent they are inconsistent with this order." 
• March 14, 2025 – The Continuing Resolution keeping the government funded expires, requiring Congressional action to pass a new budget and potentially influencing the future of grant programs. On March 11, 2024 - the House passes Continuing Budget Resolution that would lock in 2024 funding levels for the remainder of Fiscal Year 2025 (ends September 30, 2024). The bill moved on to the Senate where it needed 60 votes to pass and avoid a government shutdown. On March 14, 2025 - after days of infighting among Senate Democrats, the Senate passed a continuing resolution (CR). President Trump signed the CR into law on March 15, 2025, averting a government shutdown. The short-term spending bill will fund the government through the end of September. 

 

What was inside Memorandum M-25-13?

The stated goal of Memorandum M-25-13 was to temporarily pause federal funding distribution to ensure taxpayer dollars are used to advance Administration priorities. This includes:

• Strengthening national security
• Reducing inflation
• Promoting energy independence and U.S.-based manufacturing
• Ending Diversity, Equity, and Inclusion (DEI) initiatives
• Eliminating support for green energy programs

Federal agencies were provided with a spreadsheet by the OMB to designate which Federal financial assistance programs, projects, and activities may conflict with recent executive orders. They were further tasked with (1) assigning a “senior political appointee” to ensure all funding conforms to new administrative priorities, and (2) reviewing pending awards of Federal financial assistance to ensure compliance. In total, this review would encompass more than $3 trillion dollars across 2,600 funding programs.

According to the memo, documentation must be submitted to the Administration by February 10, 2025. The OMB and senior political appointees of the new Administration were expected to review this information and make recommendations on programs that are inconsistent with Administration priorities in the weeks that followed.

 

How does Memorandum M-25-14 change things?

The new memo issued by the OMB rescinds its predecessor and encourages those with questions on the President’s Executive Orders to contact their General Counsel. This retraction allows federal financial assistance to continue flowing to recipients.

 

What happens next?

Shortly after the original memo was rescinded, Matthew Vaeth, acting director of the OMB, clarified that federal agencies should “to the extent permissible under applicable law” continue their pause on all activities related to obligation or disbursement of funding that may be impacted by the Administration’s other executive orders.

White House Press Secretary, Karoline Leavitt, further clarified the Administration’s plans for reviews of the federal government’s 2,600 funding programs remain “in full force” and that more executive action to reduce federal funding should be expected. No further clarification on the OMB’s review – including timeline, expectations, or participating individuals - has been made public at this time.  

 

What does this mean for Grant Seekers?

While the impacts of executive action around grant funding continue to solidify, the broad scope of this conflict creates immediate challenges for those relying on federal grant funding. Here are the key takeaways:

1. Grants Can Continue (For Now)

Memorandum M-25-14 effectively ended the temporary hold on federal financial assistance. This means that existing grant program monies that have already been obligated should continue to be disbursed.

2. New Grants Remain in Limbo

The OMB’s recommendation to pause distribution and obligation of funding means that all pending or currently active Notice of Funding Opportunities (NOFOs) should still expect to be placed under review and could be modified or withdrawn to align with the Administration’s goals. The Administration is expected to continue in its fact-finding mode, collecting data on more than 2,600 programs, including school meal initiatives, foreign aid, and veteran reintegration programs.

3. Discretionary Programs Are Most at Risk

Grant programs that allow federal agencies significant discretion in funding priority decisions are the most vulnerable. However, statutory grant programs—those written into law with clear funding priority parameters—are more insulated from sudden cuts or modifications.

4. Legal and Political Uncertainty Continues

Several lawsuits have already been filed by states, nonprofits, and active grant award recipients challenging the legality of the President’s original memorandum. While the overriding memorandum provides some relief, the long-term outlook depends on future judicial rulings and potential Congressional intervention.

 

Looking Ahead: Reconciliation and the 2025 Federal Budget

Reconciliation

As certain members of Congress push for significant spending cuts to the FY26 budget, many wonder if reconciliation, one of their budget tools, will be leveraged to achieve this goal. To understand the longer-term impact of a possible reconciliation package, though, it is necessary to explore the purpose of reconciliation and provide background on the process.

The budget reconciliation process has been around since 1974, with the current rules codified in the Congressional Budget Act of 1990.  Reconciliation was created to expedite certain approval actions for the federal fiscal year budget, specifically by allowing crafted budget legislation to bypass the three-fifths supermajority required to overcome a filibuster in the United States Senate. It essentially sets up a streamlined process to pass budget measures when one party controls both chambers of Congress and the Presidency.

Reconciliation typically works best when the party in control of Congress has large majorities. Currently, only a few representatives separate the majority from the minority party in both the House and Senate. There a several rules that govern reconciliation, including one that requires that the proposed legislation does not add to the national deficit, and another rule that disallows policy measures that are incidental to the budget. Considering such rules and the diversity of opinions within a single political party, reconciliation can be difficult to implement. Therefore, reconciliation is seldom used even when there is single-party alignment among the House, Senate, and Presidency. The last time there was an attempted reconciliation by the controlling party with only a slim majority was in 2017, when the GOP led Congress the failed to repeal the Affordable Care Act (Obamacare).

Regardless, even if reconciliation is successful, it is not likely to have a major impact on the bulk of grant programs initiated at the federal level. Most federal grant programming is appropriated through the annual discretionary budget process. Any cuts that occur through reconciliation will impact mandatory spending. Mandatory programs are those that do not require annual appropriations, including Social Security, Medicare, Medicaid, and the Supplemental Nutrition Assistance Program (Food Stamps).

 

2025 Annual Discretionary Budget

Background

The annual federal discretionary budget is where the magic happens when it comes to grant programs. Federal Fiscal Year 2025 started on October 1, 2024, and will end on September 30, 2025. In a perfect world, Congress would pass a federal fiscal year budget before the fiscal year starts. Congress has only met this deadline three times in the past fifty years, most recently in 1997. When Congress fails to enact a budget for the upcoming fiscal year prior to its start, this leads to a government shutdown, unless they instead pass a Continuing Resolution (CR). Continuing Resolutions essentially keep funding levels consistent with the previous year’s approved budget. Federal agencies have grown used to operating in this environment over the last fifty years. In fact, there have already been two CRs this year, the first extending federal funding until December 20, 2024, and the second until March 14, 2025.

Since the annual discretionary budget is not subject to the reconciliation process, it must be passed under standard procedures in Congress. At the end of the standard procedures process, both the House and Senate must pass identical budget bills before the legislation can move on to the President to be signed into law. The Senate requires a three—fifths majority approval to move proposed legislation, including the discretionary budget, forward for a vote. Under House rules, a simple majority is all that is necessary to pass the proposed budget legislation. While one might assume that means Republicans in the House will not need Democratic support, that belies recent history. Considering the diversity of priorities among GOP legislators, particularly fiscal conservatives and moderates, Republicans typically must negotiate and rely on votes from Democrats to move things forward. Further, even if the House passed a partisan bill, there currently is not a filibuster-proof GOP majority in the Senate.

 

Impact on Grant Programs

Congress will need bipartisan support to pass the FY26 federal budget (funding the government from October 1, 2025, through September 30, 2026). In fact, this is the primary explanation as to why the annual discretionary budget is so consistent over time. The cross-aisle negotiation required to move legislation forward makes it very difficult to cut spending, particularly when it comes to popular grant programs. As such, we anticipate the 2026 budget to look very similar to 2024’s (and by extension, 2025’s), with approximately $1.8 trillion available to maintain the current grant funding landscape. The main question becomes, how do we get to that point?

 

Current Status of Budget Negotiations

On Tuesday, March 11, the House of Representatives passed a continuing resolution (CR) that would fund the government for the remainder of the fiscal year (September 30, 2025).  On March 14, 2025, after days of internal debates among Democrats, the Senate had enough votes to pass this same CR. President Trump signed the CR funding bill into law on Saturday, averting a government shutdown and locking in 2025 spending levels to be consistent with 2024. This short-term spending bill will fund the government through the end of September.

This information will be updated as 2025 Budget negotiations continue.

 

 

Looking Ahead: Strategies for Grant Seekers

Despite the uncertainty, there are still ways to navigate the evolving grant landscape effectively:

1. Explore Alternative Funding Sources

• State & Local-Sourced Grants: Many states and municipalities administer their own grant programs that may not be affected by federal actions.
• Private & Corporate Foundations: Nonprofit and corporate philanthropy organizations may fill some funding gaps. Private funders have a history of stepping up in situations where public funding falls short or is temporarily jeopardized (i.e. most recently with the global Coronavirus pandemic).
• Industry Partnerships: Businesses may seek public-private partnerships to support innovation and development projects.

2. Stay Informed and Agile

• Monitor updates from the OMB, federal agencies, and Grants Office to track funding opportunities and potential reinstatements.
• Be ready to pivot if a target grant program’s priorities shift away from previous competitions—consider adjusting proposals to align with Administration priorities where feasible. Be prepared with back-up grant opportunities your organization is also willing to consider for pursuit.

3. Advocate and Engage with Policymakers

• Contact Congressional representatives to express concerns about program cuts and advocate for continued funding in critical areas.
• Participate in industry coalitions or trade associations that may have a voice in lobbying efforts.

 

Final Thoughts: Adaptation is Key

While these executive actions have created significant disruption, it does not signal the end of federal grant programs. History shows that grant funding remains a core mechanism for public investment, and bipartisan Congressional support for key initiatives will ensure many essential programs continue.

At Grants Office, LLC, we are committed to guiding grant seekers through this complex and rapidly changing environment. Whether it’s identifying alternative funding sources, interpreting new policies, or adjusting grant strategies, we are here to help.

Stay connected with us for ongoing updates and insights into the evolving federal grant landscape by joining our free Community of Grantseekers.

 

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View and download our recent Grantscasts and additional resources:
The Pause on Federal Funding and Continuing the Conversation

The Pause on Federal Funding: Making Sense of Recent Executive Orders and the Impact on Federal Grant Funding

The latest in a flurry of Executive Orders has hit home for grant-funded agencies across the country. Despite the rescission of M-25-13, which placed a temporary pause on "all activities related to obligation or disbursement of all Federal financial assistance," there are plenty of questions surrounding the future of federal funding. All federal agencies are expected to submit reports to the Office of Management and Budget (OMB) by February 10th detailing all programs, projects, or activities that will be impacted by recent Executive Orders.

Two of Grants Office's most experienced executives discuss the implications for federal grants in the near term, and proactive steps government and nonprofit leaders can take to ensure they are ready to make the most of federal grant opportunities in 2025 and 2026.

We discussed:

• What happened with OMB Memorandum M-25-13
• The current review process underway by federal agencies to comply with recently issued Executive Orders
• What we expect to happen after the pending February 10 reporting deadline and upcoming federal budget process
• Strategies for proactive grantseekers to capture more federal funding over the next two years

With the new administration in place and significant changes afoot to both the structure and function of the federal government, complacency is not an option for grantseekers. It’s essential that we stay attentive to the shifting funding landscape. As always, Grants Office will be here to help you navigate it. We anticipate a lot of interest in this topic from our grantseeking community.

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Continuing the Conversation

When it comes to federal grant funding, you may find yourself struggling to keep up with the frantic pace of Executive Orders and other actions being taken by the new administration. As the Courts get involved it can be difficult to know exactly where things stand, and project how the dust will settle, with each decision made by the Federal Government.

Join two of Grants Office's most experienced executives for a follow-up discussion on the impact of recent decisions by the Executive Branch on federal grant funding. Whether you are concerned about your open grant awards, or your future grantseeking efforts, we have our pulse on the grant funding landscape and will keep you informed on the latest developments.

We discussed:
· Where things stand with the current federal funding review initiated under several Executive Orders.
· Other Federal Agency directives, including the NIH’s attempt to cap indirect costs and the DOJ’s decision to review funding flowing to “sanctuary cities”.
· What to expect over the next several weeks and months.
· Strategies for proactive grantseekers to capture more grant funding over the next two years.

View and download our recent Grantscasts and additional resources:
The Pause on Federal Funding and Continuing the Conversation